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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-K
 Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the fiscal year ended February 28, 2009
 Commission File Number 1-5807
 
 ENNIS, INC.
  Texas
    
    75-0256410(State or Other Jurisdiction of Incorporation or Organization)
    
    (I.R.S. Employer Identification No.)2441 Presidential Pkwy., Midlothian, Texas
    
    76065(Address of Principal Executive Offices)
    
    (Zip code)
 (Registrants Telephone Number, Including Area Code) (972) 775-9801
 Securities registered pursuant to Section 12(b) of the Act:
 Title of each class
    
    Name of each exchange on which registeredCommon Stock, par value $2.50 per share
    
    New York Stock Exchange
 Securities registered pursuant to Section 12(g) of the Act: None
 o þ
 o þ
 þ o
 o o
 o
  Large accelerated Filer o
Accelerated filer þ
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company o o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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##### 



ENNIS, INC. AND SUBSIDIARIES
FORM 10-K
FOR THE PERIOD ENDED FEBRUARY 28, 2009
 TABLE OF CONTENTS
 PART I:Item 1
    
    Business
    
    
    3Item 1A
    
    Risk Factors
    
    
    6Item 1B
    
    Unresolved Staff Comments
    
    
    11Item 2
    
    Properties
    
    
    11Item 3
    
    Legal Proceedings
    
    
    13Item 4
    
    Submission of Matters to a Vote of Security Holders
    
    
    13PART II:Item 5
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer
   Purchases of Equity Securities
    
    
    13Item 6
    
    Selected Financial Data
    
    
    15Item 7
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 7A
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    26Item 8
    
    Consolidated Financial Statements and Supplementary Data
    
    
    27Item 9
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    27Item 9A
    
    Controls and Procedures
    
    
    27Item 9B
    
    Other Information
    
    
    28PART III:Item 10
    
    Directors, Executive Officers and Corporate Governance
    
    
    28Item 11
    
    Executive Compensation
    
    
    28Item 12
    
    Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    
    28Item 13
    
    Certain Relationships and Related Transactions, and Director Independence
    
    
    29Item 14
    
    Principal Accountant Fees and Services
    
    
    29PART IV:Item 15
    
    Exhibits and Financial Statement Schedules
    
    
    29Signatures
    
    
    30EX-21EX-23EX-31.1EX-31.2EX-32.1EX-32.2




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PART I
 
 ITEM 1. BUSINESS
 Overview
    Business Segment Overview
  Print Segment
  ® SM ® SM SM ® ® SM SM SM SM SM ® SM ® ® ® SM
  3




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Apparel Segment
      4




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Patents, Licenses, Franchises and Concessions
  Intellectual Property
 SM SM SM SM SM SM SM
 Customers
  Backlog
  5




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Research and Development
  Environment
  Employees
  Available Information
 www.ennis.com www.sec.gov
 
 ITEM 1A. RISK FACTORS
  Our results and financial condition are affected by global and local market conditions, which can
adversely affect our sales, margins, and net income.
  
    
    Our ability to manage upward pressure on commodity prices and the impact of
government actions to manage national economic conditions such as consumer spending,
inflation rates and unemployment levels, particularly given the current volatility in
the global financial markets;
 6




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
    
    The impact on our margins of labor costs given our labor-intensive business model,
the trend toward higher wages in both mature and developing markets and the potential
impact of union organizing efforts on day-to-day operations of our manufacturing
facilities.
 Declining economic conditions could negatively impact our business.
   The terms and conditions of our credit facility impose certain restrictions on our operations. We
may not be able to raise additional capital, if needed for proposed expansion projects, etc.
 In 2009 we were required to write down goodwill and
other intangible assets and we may have similar charges in the future, which could cause our
financial condition and results of operations to be negatively affected in the future  page 7
  Declining financial market conditions could adversely impact the funding status of our pension
plan.
  In 2009 we were required to write down goodwill and other intangible assets and we may have similar
charges in the future, which could cause our financial condition and results of operations to be
negatively affected in the future.
  7




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Printed business forms may be superseded over time by paperless business forms or otherwise
affected by technological obsolescence and changing customer preferences, which could reduce our
sales and profits.
  Our distributors face increased competition from various sources, such as office supply
superstores. Increased competition may require us to reduce prices or to offer other incentives in
order to enable our distributors to attract new customers and retain existing customers.
  Technological improvements may reduce our competitive advantage over some of our competitors, which
could reduce our profits.
  We could experience labor disputes that could disrupt our business in the future.
  We obtain our raw materials from a limited number of suppliers and any disruption in our
relationships with these suppliers, or any substantial increase in the price of raw materials,
material shortages, or an increase in transportation costs, could have a material adverse effect on
us.
   8




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We face intense competition to gain market share, which may lead some competitors to sell
substantial amounts of goods at prices against which we cannot profitably compete.
  The apparel industry is heavily influenced by general economic cycles.
  Our apparel foreign operations could be subject to unexpected changes in regulatory requirements,
tariffs and other market barriers and political and economic instability in the countries where it
operates, which could negatively impact our operating results.
  Our apparel products are subject to foreign competition, which in the past has been faced with
significant U.S. government import restrictions.
   9




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Environmental regulations may impact our future operating results.
  Our planned expansion of facilities is subject to multiple approvals and uncertainties that could
affect our ability to complete the project on schedule or at budgeted cost.
  We are exposed to the risk of financial non-performance by our customers on a significant amount of
our sales.
  Our business incurs significant freight and transportation costs.
  10




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The price of energy is prone to significant fluctuations and volatility.
  We rely on independent contract production for a portion of our apparel production.
  We depend upon the talents and contributions of a limited number of individuals, many of whom would
be difficult to replace.
  
 ITEM 1B. UNRESOLVED STAFF COMMENTS
  
 ITEM 2. PROPERTIES
  ®
    11




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Approximate Square FootageLocation
    
    General Use
    
    Owned
    
    LeasedPrint SegmentEnnis, Texas
    
    Three Manufacturing Facilities
    
    
    325,118
    
    
    
    Chatham, Virginia
    
    Two Manufacturing Facilities
    
    
    127,956
    
    
    
    Paso Robles, California
    
    Manufacturing
    
    
    94,120
    
    
    
    DeWitt, Iowa
    
    Two Manufacturing Facilities
    
    
    95,000
    
    
    
    Knoxville, Tennessee
    
    Manufacturing
    
    
    48,057
    
    
    
    Ft, Scott, Kansas
    
    Manufacturing
    
    
    86,660
    
    
    
    Portland, Oregon
    
    Manufacturing
    
    
    
    
    
    
    139,330Wolfe City, Texas
    
    Two Manufacturing Facilities
    
    
    119,259
    
    
    
    Moultrie, Georgia
    
    Manufacturing
    
    
    25,000
    
    
    
    Coshocton, Ohio
    
    Manufacturing
    
    
    24,750
    
    
    
    Macomb, Michigan
    
    Manufacturing
    
    
    56,350
    
    
    
    Anaheim, California
    
    Three Manufacturing Operations
    
    
    
    
    
    
    63,750Bellville, Texas
    
    Manufacturing
    
    
    70,196
    
    
    
    Denver, Colorado
    
    Four Manufacturing Facilities & Warehouse
    
    
    60,000
    
    
    
    105,200Oklahoma City. Oklahoma
    
    Sales Office
    
    
    
    
    
    
    460San Antonio, Texas
    
    Manufacturing
    
    
    47,426
    
    
    
    Brooklyn Park, Minnesota
    
    Manufacturing
    
    
    94,800
    
    
    
    Roseville, Minnesota
    
    Manufacturing
    
    
    
    
    
    
    42,500Arden Hills, Minnesota
    
    Warehouse
    
    
    
    
    
    
    31,684Nevada, Iowa
    
    Manufacturing
    
    
    232,000
    
    
    
    Bridgewater, Virginia
    
    Manufacturing
    
    
    
    
    
    
    27,000Columbus, Kansas
    
    Manufacturing
    
    
    201,000
    
    
    
    Leipsic, Ohio
    
    Manufacturing
    
    
    83,216
    
    
    
    El Dorado Springs, Missouri
    
    Manufacturing
    
    
    70,894
    
    
    
    Princeton, Illinois
    
    Manufacturing
    
    
    
    
    
    
    74,340Arlington, Texas
    
    Manufacturing
    
    
    69,935Mechanicsburg, Pennsylvania
    
    Warehouse
    
    
    
    
    
    
    7,500Rancho Cordova, California
    
    Administrative Offices
    
    
    
    
    
    
    108Tullahoma, Tennessee
    
    Manufacturing
    
    
    24,950Caledonia, New York
    
    Manufacturing
    
    
    138,730
    
    
    
    Sun City, California
    
    Manufacturing
    
    
    52,617
    
    
    
    Sparks, Nevada
    
    Subleased
    
    
    
    
    
    
    18,589Carol Stream, Illinois
    
    Manufacturing
    
    
    
    
    
    
    14,400Phoenix, Arizona
    
    Manufacturing and Warehouse
    
    
    
    
    
    
    82,8002,148,034
    
    
    
    607,661Apparel SegmentAnaheim, California
    
    Office and Distribution Center
    
    
    
    
    
    
    200,000Anaheim, California
    
    Manufacturing*
    
    
    
    
    
    
    450,315Chicago, Illinois
    
    Distribution Center
    
    
    
    
    
    
    120,000Atlanta, Georgia
    
    Distribution Center
    
    
    
    
    
    
    31,958Carrollton, Texas
    
    Distribution Center
    
    
    
    
    
    
    26,136Bensalem, Pennsylvania
    
    Distribution Center
    
    
    
    
    
    
    60,848Mississauga, Canada
    
    Distribution Center
    
    
    
    
    
    
    53,982Los Angeles, California
    
    Distribution Center
    
    
    
    
    
    
    31,600Ensenada, Mexico
    
    Two Manufacturing Facilities
    
    
    112,622
    
    
    
    53,820Ensenada, Mexico
    
    Car Parking
    
    
    
    
    
    
    22,000Ensenada, Mexico
    
    Warehouse
    
    
    
    
    
    
    2,583Hermosillo, Mexico
    
    Administrative Offices
    
    
    
    
    
    
    215Hermosillo, Mexico
    
    Three Manufacturing Facilities
    
    
    
    
    
    
    126,263Hermosillo, Mexico
    
    Yard Space
    
    
    
    
    
    
    19,685
 12




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Approximate Square FootageLocation
    
    General Use
    
    Owned
    
    LeasedHermosillo, Mexico
    
    Vacant
    
    
    
    
    
    
    8,432Hermosillo, Mexico
    
    Storage for Machines
    
    
    
    
    
    
    1,640112,622
    
    
    
    1,209,477Corporate OfficesEnnis, Texas
    
    Administrative Offices
    
    
    9,300
    
    
    
    Midlothian, Texas
    
    Executive and Administrative Offices
    
    
    28,000
    
    
    
    37,300
    
    
    
    Totals
    
    
    2,297,956
    
    
    
    1,817,138
 
 *
    
    Apparel Segment  146,100 square feet of the manufacturing facilities in Anaheim,
California is subleased. Our lease expired in March 2009. Lease negotiations currently
envision landlord dealing directly with subleased space of 146,100 square feet and remaining
304,215 square fee being subject to two year lease. 
 ITEM 3. LEGAL PROCEEDINGS
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 PART II
 
 ITEM 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
  Common Stock
    
    DividendsTrading Volume
    
    per share ofCommon Stock Price Range
    
    (number of shares
    
    CommonHigh
    
    Low
    
    in thousands)
    
    StockFiscal Year Ended February 28, 2009First Quarter
    
    $
    19.18
    
    
    $
    14.31
    
    
    
    5,173
    
    
    $
    0.155Second Quarter
    
    
    19.92
    
    
    
    13.55
    
    
    
    4,324
    
    
    $
    0.155Third Quarter
    
    
    18.16
    
    
    
    8.54
    
    
    
    5,357
    
    
    $
    0.155Fourth Quarter
    
    
    13.37
    
    
    
    8.01
    
    
    
    4,412
    
    
    $
    0.155Fiscal Year Ended February 29, 2008First Quarter
    
    $
    28.12
    
    
    $
    22.41
    
    
    
    6,700
    
    
    $
    0.155Second Quarter
    
    
    25.53
    
    
    
    18.36
    
    
    
    8,183
    
    
    $
    0.155Third Quarter
    
    
    22.92
    
    
    
    16.46
    
    
    
    5,442
    
    
    $
    0.155Fourth Quarter
    
    
    20.28
    
    
    
    14.93
    
    
    
    6,018
    
    
    $
    0.155
  13




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Stock Performance Graph
  COMPARISON
OF 5 YEAR CUMULATIVE TOTAL RETURN*
 
 
 *
    
    $100 Invested on 2/29/04 in stock or index, including reinvestment of dividends. Fiscal year ending February 28 or February 29.Copyright© 2009 S&P, a division of The McGraw-Hill Companies Inc. All rights reserved. 2004
    
    2005
    
    2006
    
    2007
    
    2008
    
    2009Ennis, Inc.
    
    
    100.00
    
    
    
    104.90
    
    
    
    125.47
    
    
    
    169.02
    
    
    
    107.63
    
    
    
    57.76S&P 500
    
    
    100.00
    
    
    
    106.98
    
    
    
    115.96
    
    
    
    129.84
    
    
    
    125.17
    
    
    
    70.95Russell 2000
    
    
    100.00
    
    
    
    109.53
    
    
    
    127.70
    
    
    
    140.30
    
    
    
    122.85
    
    
    
    70.78
 The stock price performance included in this graph is not necessarily indicative of future
stock price performance.
 14




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ITEM 6. SELECTED FINANCIAL DATA
  Fiscal Years Ended2009
    
    2008
    
    2007
    
    2006
    
    2005(Dollars and shares in thousands, except per share amounts)Operating results:Net sales
    
    $
    584,029
    
    
    $
    610,610
    
    
    $
    584,713
    
    
    $
    559,397
    
    
    $
    365,353Gross profit
    
    
    143,476
    
    
    
    163,874
    
    
    
    156,322
    
    
    
    151,961
    
    
    
    93,217SG&A expenses
    
    
    86,217
    
    
    
    88,851
    
    
    
    83,121
    
    
    
    79,824
    
    
    
    53,560Impairment of goodwill and trademarks
    
    
    67,851
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net earnings (loss)
    
    
    (32,768
    )
    
    
    44,590
    
    
    
    41,601
    
    
    
    40,537
    
    
    
    22,959Earnings (loss) and dividends per share:Basic
    
    $
    (1.27
    )
    
    $
    1.74
    
    
    $
    1.63
    
    
    $
    1.59
    
    
    $
    1.21Diluted
    
    
    (1.27
    )
    
    
    1.72
    
    
    
    1.62
    
    
    
    1.58
    
    
    
    1.19Dividends
    
    
    0.62
    
    
    
    0.62
    
    
    
    0.62
    
    
    
    0.62
    
    
    
    0.62Weighted average shares outstanding:Basic
    
    
    25,707
    
    
    
    25,623
    
    
    
    25,531
    
    
    
    25,453
    
    
    
    18,936Diluted
    
    
    25,790
    
    
    
    25,860
    
    
    
    25,759
    
    
    
    25,728
    
    
    
    19,260Financial Position:Working capital
    
    $
    138,374
    
    
    $
    133,993
    
    
    $
    102,269
    
    
    $
    94,494
    
    
    $
    70,247Current assets
    
    
    182,254
    
    
    
    185,819
    
    
    
    151,516
    
    
    
    158,455
    
    
    
    151,630Total assets
    
    
    436,380
    
    
    
    513,131
    
    
    
    478,228
    
    
    
    494,401
    
    
    
    497,246Current liabilities
    
    
    43,880
    
    
    
    51,826
    
    
    
    49,247
    
    
    
    63,961
    
    
    
    81,383Long-term debt
    
    
    76,185
    
    
    
    90,710
    
    
    
    88,971
    
    
    
    102,916
    
    
    
    112,342Total liabilities
    
    
    144,374
    
    
    
    164,652
    
    
    
    161,825
    
    
    
    197,066
    
    
    
    225,515Equity
    
    
    292,006
    
    
    
    348,479
    
    
    
    316,403
    
    
    
    297,335
    
    
    
    271,731Current ratio
    
    
    4.15 to 1.0
    
    
    
    3.59 to 1.0
    
    
    
    3.08 to 1.0
    
    
    
    2.48 to 1.0
    
    
    
    1.86 to 1.0Long-term debt to equity
    
    
    .26 to 1.0
    
    
    
    .26 to 1.0
    
    
    
    .28 to 1.0
    
    
    
    .35 to 1.0
    
    
    
    .41 to 1.0
 
 ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Cautionary Statements
  15




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##### Table of Contents



Results of Operations
 Consolidated
    
    Fiscal Years EndedStatements
of Earnings  Data
    
    2009
    
    
    2008
    
    
    2007Net sales
    
    $
    584,029
    
    
    
    100.0
    %
    
    $
    610,610
    
    
    
    100.0
    %
    
    $
    584,713
    
    
    
    100.0
    %Cost of goods sold
    
    
    440,553
    
    
    
    75.4
    
    
    
    446,736
    
    
    
    73.2
    
    
    
    428,391
    
    
    
    73.3Gross profit
    
    
    143,476
    
    
    
    24.6
    
    
    
    163,874
    
    
    
    26.8
    
    
    
    156,322
    
    
    
    26.7Selling, general and administrative
    
    
    86,217
    
    
    
    14.8
    
    
    
    88,851
    
    
    
    14.5
    
    
    
    83,121
    
    
    
    14.2Impairment of goodwill and
trademarks
    
    
    67,851
    
    
    
    11.6
    
    
    
    
    
    
    
    0.0
    
    
    
    
    
    
    
    0.0Gain from disposal of assets
    
    
    (514
    )
    
    
    (0.1
    )
    
    
    (757
    )
    
    
    (0.1
    )
    
    
    (258
    )
    
    
    0.0Income (loss) from operations
    
    
    (10,078
    )
    
    
    (1.7
    )
    
    
    75,780
    
    
    
    12.4
    
    
    
    73,459
    
    
    
    12.5Other expense, net
    
    
    (2,981
    )
    
    
    (0.5
    )
    
    
    (5,995
    )
    
    
    (1.0
    )
    
    
    (7,094
    )
    
    
    (1.2
    )Earnings (loss) before income taxes
    
    
    (13,059
    )
    
    
    (2.2
    )
    
    
    69,785
    
    
    
    11.4
    
    
    
    66,365
    
    
    
    11.3Provision for income taxes
    
    
    19,709
    
    
    
    3.4
    
    
    
    25,195
    
    
    
    4.1
    
    
    
    24,764
    
    
    
    4.2Net earnings (loss)
    
    $
    (32,768
    )
    
    
    -5.6
    %
    
    $
    44,590
    
    
    
    7.3
    %
    
    $
    41,601
    
    
    
    7.1
    %
 Critical Accounting Policies and Judgments
     16




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17




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Results of Operations  Consolidated
 Overview.
 Net Sales.
  Cost of Goods Sold.
  Selling, general, and administrative expenses.
  18




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Gain from disposal of assets.
 Impairment of goodwill and trademarks.
 Income from operations.
  Other income and expense
 Provision for income taxes.
 Net earnings.
  Results of Operations  Segments
 Fiscal Years EndedNet Sales by Segment (in thousands)
    
    2009
    
    
    2008
    
    
    2007Print
    
    $
    327,034
    
    
    $
    345,042
    
    
    $
    325,679Apparel
    
    
    256,995
    
    
    
    265,568
    
    
    
    259,034Total
    
    $
    584,029
    
    
    $
    610,610
    
    
    $
    584,713
 19




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Print Segment
   Apparel Segment
   20




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Fiscal Years EndedGross Profit by Segment (in thousands)
    
    2009
    
    
    2008
    
    
    2007Print
    
    $
    85,295
    
    
    $
    93,767
    
    
    $
    81,986Apparel
    
    
    58,181
    
    
    
    70,107
    
    
    
    74,336Total
    
    $
    143,476
    
    
    $
    163,874
    
    
    $
    156,322
 Print Segment.
  Apparel Segment
 th
  Fiscal Years EndedProfit by Segment (in thousands)
    
    2009
    
    
    2008
    
    
    2007Print
    
    $
    51,553
    
    
    $
    56,012
    
    
    $
    46,077Apparel
    
    
    (49,416
    )
    
    
    29,367
    
    
    
    33,321Total
    
    
    2,137
    
    
    
    85,379
    
    
    
    79,398Less corporate expenses
    
    
    15,196
    
    
    
    15,594
    
    
    
    13,033Earnings (loss) before income taxes
    
    $
    (13,059
    )
    
    $
    69,785
    
    
    $
    66,365
 21




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Print Segment
  Apparel Segment.
 Liquidity and Capital Resources
 Fiscal Years Ended(Dollars in thousands)
    
    2009
    
    2008
    
    ChangeWorking Capital
    
    $
    138,374
    
    
    $
    133,993
    
    
    
    3.3
    %Cash and cash equivalents
    
    $
    9,286
    
    
    $
    3,393
    
    
    
    173.7
    %
 Working Capital.
 Cash and cash equivalents.
 Fiscal Years Ended(Dollars in thousands)
    
    2009
    
    2008
    
    ChangeNet Cash provided by operating activities
    
    $
    44,216
    
    
    $
    30,444
    
    
    
    45.2
    %Net Cash used in investing activities
    
    $
    (5,350
    )
    
    $
    (17,285
    )
    
    
    -69.0
    %Net Cash used in financing activities
    
    $
    (32,464
    )
    
    $
    (13,516
    )
    
    
    140.2
    %
 Cash flows from operating activities.
 Cash flows from investing activities.
 22




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##### Table of Contents



Cash flows from financing activities.
 Stock Repurchase 
 Credit Facility 
    Pension 
 Inventories 
 23




---



##### Table of Contents



Capital Expenditures 
  Contractual Obligations & Off-Balance Sheet Arrangements 
 2014 toTotal
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    2019Debt:Revolving credit facility
    
    $
    74,000
    
    
    $
    
    
    
    $
    74,000
    
    
    $
    
    
    
    $
    
    
    
    $
    Interest rate swap
    
    
    2,185
    
    
    
    
    
    
    
    2,185
    
    
    
    
    
    
    
    
    
    
    
    Capital leases
    
    
    210
    
    
    
    210
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Debt subtotal
    
    
    76,395
    
    
    
    210
    
    
    
    76,185
    
    
    
    
    
    
    
    
    
    
    
    Interest on capital leases
    
    
    5
    
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Debt and interest total
    
    
    76,400
    
    
    
    215
    
    
    
    76,185
    
    
    
    
    
    
    
    
    
    
    
    Other contractual commitments:Estimated pension benefit payments
    
    
    37,715
    
    
    
    3,075
    
    
    
    3,850
    
    
    
    3,870
    
    
    
    4,670
    
    
    
    22,250Letters of credit
    
    
    3,042
    
    
    
    3,042
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating leases
    
    
    14,023
    
    
    
    5,409
    
    
    
    4,049
    
    
    
    2,354
    
    
    
    1,615
    
    
    
    596Total other contractual
commitments
    
    
    54,780
    
    
    
    11,526
    
    
    
    7,899
    
    
    
    6,224
    
    
    
    6,285
    
    
    
    22,846Total
    
    $
    131,180
    
    
    $
    11,741
    
    
    $
    84,084
    
    
    $
    6,224
    
    
    $
    6,285
    
    
    $
    22,846
  New Accounting Pronouncements
 FAS 157 .
 FAS 141R.
 24




---



##### Table of Contents



FAS 160.
 FAS 161.
 FSP FAS 142-3.
 FAS 162. The Meaning of Present Fairly in Conformity with
Generally Accepted Accounting Principles
 FSP
EITF 03-6-1.
 FSP FAS 133-1 and FIN 45-4.
 FSP FAS 157-3.
 25




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##### Table of Contents



FSP FAS 157-4.
 FSP FAS 107-1 and APB 28-1.
 FSP FAS 132R-1.
 
 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Market Risk
 Cash and Cash Equivalents
  Interest Rates
  26




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##### Table of Contents



Foreign Exchange
   
 ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  
 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures.
  MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
   i.
    
    Pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of
assets of the Company;
 27




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##### Table of Contents



ii.
    
    Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and
expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company; andiii.
    
    Provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use, or dispositions of the Companys
assets that could have a material effect on the financial statements.
  Internal ControlIntegrated Framework
  
 ITEM 9B. OTHER INFORMATION
  
 PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
   
 ITEM 11. EXECUTIVE COMPENSATION
  
 ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
  28




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##### Table of Contents



Number ofsecuritiesavailable forfuture issuancesNumber of
    
    
    
    
    
    
    under equitysecurities to be
    
    
    Weighted
    
    
    compensationissued upon
    
    
    average
    
    
    plans (excludingexercise of
    
    
    exercise price
    
    
    securitiesoutstanding
    
    
    of outstanding
    
    
    reflected inoptions
    
    
    options
    
    
    column (a)Plan Category
    
    (a)
    
    
    (b)
    
    
    (c)Equity compensation plans approved by the security
holders (1)
    
    
    421,654
    
    
    $
    10.98
    
    
    
    355,430Equity compensation plans not approved by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    421,654
    
    
    $
    10.98
    
    
    
    355,430
 
 
 (1)
    
    Includes the 1998 Option and Restricted Stock Plan, amended and restated as of June 17, 2004
and the 1991 Incentive Stock Option Plan. Includes 103,091 shares of restricted stock. 
 ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
  
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
  
 PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 (a)
    
    Documents filed as a part of the report:
 (1)
    
    Index to Consolidated Financial Statements of the CompanyAn Index to Consolidated Financial Statements has been filed as a part of this Report
beginning on page F-1 hereof.(2)
    
    All schedules for which provision is made in the applicable accounting regulation
of the SEC have been omitted because of the absence of the conditions under which they
would be required or because the information required is included in the consolidated
financial statements of the Registrant or the notes thereto.(3)
    
    ExhibitsAn Index to Exhibits has been filed as a part of this Report beginning on page E-1 and
is herein incorporated by reference.
 29




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##### Table of Contents



SIGNATURES
  ENNIS, INC.Date: May 11, 2009
    BY:
    /s/ KEITH S. WALTERSKeith S. Walters, Chairman of the Board,Chief Executive Officer and PresidentDate: May 11, 2009
    BY:
    /s/ RICHARD L. TRAVIS, JR.Richard L. Travis, Jr.Vice President  Finance and CFO, Secretary and
Principal Financial and Accounting Officer  Date: May 11, 2009
    
    BY:
    
    /s/ KEITH S. WALTERSKeith S. Walters, ChairmanDate: May 11, 2009
    
    BY:
    
    /s/ MICHAEL D. MAGILLMichael D. Magill, DirectorDate: May 11, 2009
    
    BY:
    
    /s/ FRANK D. BRACKENFrank D. Bracken, DirectorDate: May 11, 2009
    
    BY:
    
    /s/ GODFREY M. LONG, JR.Godfrey M. Long, Jr., DirectorDate: May 11, 2009
    
    BY:
    
    /s/ THOMAS R. PRICEThomas R. Price, DirectorDate: May 11, 2009
    
    BY:
    
    /s/ KENNETH G. PRITCHETTKenneth G. Pritchett, DirectorDate: May 11, 2009
    
    BY:
    
    /s/ ALEJANDRO QUIROZAlejandro Quiroz, DirectorDate: May 11, 2009
    
    BY:
    
    /s/ MICHAEL J. SCHAEFERMichael J. Schaefer, DirectorDate: May 11, 2009
    
    BY:
    
    /s/ JAMES C. TAYLORJames C. Taylor, Director
 30




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
Index to Consolidated Financial Statements
 Report of Independent Registered Public Accounting Firm
    
    
    F-2Report of Independent Registered Public Accounting Firm
    
    
    F-3Consolidated Balance Sheets  February 28, 2009 and February 29, 2008
    
    
    F-4Consolidated Statements of Earnings  Fiscal years ended 2009, 2008 and 2007
    
    
    F-6Consolidated Statements of Changes in Shareholders Equity and Comprehensive
Income  Fiscal years ended 2009, 2008 and 2007
    
    
    F-7Consolidated Statements of Cash Flows  Fiscal years ended 2009, 2008 and 2007
    
    
    F-8Notes to Consolidated Financial Statements
    
    
    F-9
 F-1




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
    Employers Accounting for Defined Benefit
Pension and Other Postretirement Plans: An Amendment of FASB Statements No. 87, 88, 106, and 132R
 Internal ControlIntegrated Framework )
 /s/ Grant Thornton LLPDallas, TexasMay 11, 2009 F-2




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
 Internal
ControlIntegrated Framework
    Internal
ControlIntegrated Framework
  /s/ Grant Thornton LLP 
 F-3




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS  (Dollars in thousands)
 Fiscal Years Ended2009
    
    
    2008AssetsCurrent assetsCash and cash equivalents
    
    $
    9,286
    
    
    $
    3,393Accounts receivable, net of allowance for doubtful receivables
of $3,561 at February 28, 2009 and $3,954 at February 29, 2008
    
    
    57,467
    
    
    
    72,278Prepaid expenses
    
    
    3,780
    
    
    
    3,500Prepaid income taxes
    
    
    4,826
    
    
    
    Inventories
    
    
    101,167
    
    
    
    98,570Deferred income taxes
    
    
    5,728
    
    
    
    7,786Assets held for sale
    
    
    
    
    
    
    292Total current assets
    
    
    182,254
    
    
    
    185,819Property, plant and equipment, at costPlant, machinery and equipment
    
    
    133,300
    
    
    
    130,214Land and buildings
    
    
    43,150
    
    
    
    42,793Other
    
    
    22,679
    
    
    
    22,586Total property, plant and equipment
    
    
    199,129
    
    
    
    195,593Less accumulated depreciation
    
    
    144,457
    
    
    
    136,605Net property, plant and equipment
    
    
    54,672
    
    
    
    58,988Goodwill
    
    
    117,341
    
    
    
    178,388Trademarks and tradenames, net
    
    
    59,030
    
    
    
    63,880Customer lists, net
    
    
    22,007
    
    
    
    24,260Deferred finance charges, net
    
    
    486
    
    
    
    934Prepaid pension asset
    
    
    
    
    
    
    260Other assets
    
    
    590
    
    
    
    602Total assets
    
    $
    436,380
    
    
    $
    513,131
  F-4




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS  (Dollars in thousands, except for share amounts)
 Fiscal Years Ended2009
    
    
    2008Liabilities and Shareholders EquityCurrent liabilitiesAccounts payable
    
    $
    24,723
    
    
    $
    29,658Accrued expensesEmployee compensation and benefits
    
    
    12,919
    
    
    
    14,840Taxes other than income
    
    
    1,322
    
    
    
    989Federal and state income taxes payable
    
    
    
    
    
    
    501Other
    
    
    4,706
    
    
    
    5,583Current installments of long-term debt
    
    
    210
    
    
    
    255Total current liabilities
    
    
    43,880
    
    
    
    51,826Long-term debt, less current installments
    
    
    76,185
    
    
    
    90,710Liability for pension benefits
    
    
    6,988
    
    
    
    Deferred income taxes
    
    
    16,250
    
    
    
    20,775Other liabilities
    
    
    1,071
    
    
    
    1,341Total liabilities
    
    
    144,374
    
    
    
    164,652Commitments and contingenciesShareholders equityPreferred stock $10 par value,
authorized 1,000,000 shares; none issued
    
    
    
    
    
    
    Common stock $2.50 par value, authorized 40,000,000 shares;
issued 30,053,443 shares in 2009 and 2008
    
    
    75,134
    
    
    
    75,134Additional paid in capital
    
    
    122,448
    
    
    
    122,566Retained earnings
    
    
    186,857
    
    
    
    235,624Accumulated other comprehensive income (loss):Foreign currency translation
    
    
    (1,016
    )
    
    
    929Unrealized gain (loss) on derivative instruments
    
    
    (1,387
    )
    
    
    Minimum pension liability
    
    
    (12,107
    )
    
    
    (6,450
    )(14,510
    )
    
    
    (5,521
    )369,929
    
    
    
    427,803Treasury stockCost of 4,336,557 shares in 2009 and 4,391,193 shares in 2008
    
    
    (77,923
    )
    
    
    (79,324
    )Total shareholders equity
    
    
    292,006
    
    
    
    348,479Total liabilities and shareholders equity
    
    $
    436,380
    
    
    $
    513,131
  F-5




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS  (Dollars in thousands, except share and per share amounts)
 Fiscal Years Ended2009
    
    
    2008
    
    
    2007Net sales
    
    $
    584,029
    
    
    $
    610,610
    
    
    $
    584,713Cost of goods sold
    
    
    440,553
    
    
    
    446,736
    
    
    
    428,391Gross profit
    
    
    143,476
    
    
    
    163,874
    
    
    
    156,322Selling, general and administrative
    
    
    86,217
    
    
    
    88,851
    
    
    
    83,121Impairment of goodwill and trademarks
    
    
    67,851
    
    
    
    
    
    
    
    Gain from disposal of assets
    
    
    (514
    )
    
    
    (757
    )
    
    
    (258
    )Income (loss) from operations
    
    
    (10,078
    )
    
    
    75,780
    
    
    
    73,459Other income (expense)Interest expense
    
    
    (3,363
    )
    
    
    (5,678
    )
    
    
    (6,936
    )Other, net
    
    
    382
    
    
    
    (317
    )
    
    
    (158
    )(2,981
    )
    
    
    (5,995
    )
    
    
    (7,094
    )Earnings (loss) before income taxes
    
    
    (13,059
    )
    
    
    69,785
    
    
    
    66,365Provision for income taxes
    
    
    19,709
    
    
    
    25,195
    
    
    
    24,764Net earnings (loss)
    
    $
    (32,768
    )
    
    $
    44,590
    
    
    $
    41,601Weighted average common shares outstandingBasic
    
    
    25,707,265
    
    
    
    25,623,325
    
    
    
    25,530,732Diluted
    
    
    25,790,166
    
    
    
    25,860,358
    
    
    
    25,758,948Per share amountsNet earnings (loss)  basic
    
    $
    (1.27
    )
    
    $
    1.74
    
    
    $
    1.63Net earnings (loss)  diluted
    
    $
    (1.27
    )
    
    $
    1.72
    
    
    $
    1.62Cash dividends per share
    
    $
    0.62
    
    
    $
    0.62
    
    
    $
    0.62
  F-6




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY AND
COMPREHENSIVE INCOME FOR THE FISCAL YEARS ENDED 2007, 2008, AND 2009  (Dollars in thousands, except share and per share amounts)
 AccumulatedAdditional
    
    
    
    
    
    
    OtherCommon Stock
    
    
    Paid-in
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury StockShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Shares
    
    
    Amount
    
    
    TotalBalance March 1, 2006
    
    
    30,053,443
    
    
    $
    75,134
    
    
    $
    122,922
    
    
    $
    181,423
    
    
    $
    460
    
    
    
    (4,574,329
    )
    
    $
    (82,604
    )
    
    $
    297,335Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,601
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,601Foreign currency translation,
net of deferred tax of $255
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (435
    )
    
    
    
    
    
    
    
    
    
    
    (435
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,166Adjustment to initially apply
FAS 158, net of tax of $4,739
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,396
    )
    
    
    
    
    
    
    
    
    
    
    (7,396
    )Dividends declared
($.62 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,834
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,834
    )Excess tax benefit of stock
option exercises and restricted
stock grants
    
    
    
    
    
    
    
    
    
    
    169
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    169Stock based compensation
    
    
    
    
    
    
    
    
    
    
    302
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    302Exercise of stock options
and restricted stock grants
    
    
    
    
    
    
    
    
    
    
    (1,088
    )
    
    
    
    
    
    
    
    
    
    
    98,367
    
    
    
    1,749
    
    
    
    661Balance February 28, 2007
    
    
    30,053,443
    
    
    
    75,134
    
    
    
    122,305
    
    
    
    207,190
    
    
    
    (7,371
    )
    
    
    (4,475,962
    )
    
    
    (80,855
    )
    
    
    316,403Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44,590
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44,590Foreign currency translation,
net of deferred tax of $526
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    904
    
    
    
    
    
    
    
    
    
    
    
    904Adjustment to pension
net of deferred tax of $584
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    946
    
    
    
    
    
    
    
    
    
    
    
    946Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    46,440Cumulative impact of a change in
accounting for income tax
uncertainties pursuant to FIN 48
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (240
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (240
    )Dividends declared
($.62 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,916
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,916
    )Excess tax benefit of stock
option exercises and restricted
stock grants
    
    
    
    
    
    
    
    
    
    
    385
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    385Stock based compensation
    
    
    
    
    
    
    
    
    
    
    734
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    734Exercise of stock options
and restricted stock grants
    
    
    
    
    
    
    
    
    
    
    (858
    )
    
    
    
    
    
    
    
    
    
    
    84,769
    
    
    
    1,531
    
    
    
    673Balance February 29, 2008
    
    
    30,053,443
    
    
    
    75,134
    
    
    
    122,566
    
    
    
    235,624
    
    
    
    (5,521
    )
    
    
    (4,391,193
    )
    
    
    (79,324
    )
    
    
    348,479Net earnings (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (32,768
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (32,768
    )Foreign currency translation,
net of deferred tax of $1,142
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,945
    )
    
    
    
    
    
    
    
    
    
    
    (1,945
    )Unrealized loss on
derivative instruments, net
of deferred tax of $797
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,387
    )
    
    
    
    
    
    
    
    
    
    
    (1,387
    )Adjustment to pension
net of deferred tax of $3,252
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,657
    )
    
    
    
    
    
    
    
    
    
    
    (5,657
    )Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (41,757
    )Dividends declared
($0.62 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,999
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,999
    )Excess tax benefit of stockoption exercises and restricted
stock grants
    
    
    
    
    
    
    
    
    
    
    249
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    249Stock based compensation
    
    
    
    
    
    
    
    
    
    
    993
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    993Exercise of stock options
and restricted stock grants
    
    
    
    
    
    
    
    
    
    
    (1,360
    )
    
    
    
    
    
    
    
    
    
    
    107,336
    
    
    
    2,000
    
    
    
    640Stock repurchases
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (52,700
    )
    
    
    (599
    )
    
    
    (599
    )Balance February 28, 2009
    
    
    30,053,443
    
    
    $
    75,134
    
    
    $
    122,448
    
    
    $
    186,857
    
    
    $
    (14,510
    )
    
    
    (4,336,557
    )
    
    $
    (77,923
    )
    
    $
    292,006
  F-7




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
 Fiscal Years Ended2009
    
    
    2008
    
    
    2007Cash flows from operating activities:Net earnings (loss)
    
    $
    (32,768
    )
    
    $
    44,590
    
    
    $
    41,601Adjustments to reconcile net earnings (loss) to net cash
provided by operating activities:Depreciation
    
    
    9,993
    
    
    
    12,217
    
    
    
    14,670Amortization of deferred finance charges
    
    
    448
    
    
    
    448
    
    
    
    451Amortization of trademarks and customer lists
    
    
    2,419
    
    
    
    2,062
    
    
    
    1,957Impairment of goodwill and trademarks
    
    
    67,851
    
    
    
    
    
    
    
    Gain from disposal of assets
    
    
    (514
    )
    
    
    (757
    )
    
    
    (258
    )Bad debt expense
    
    
    3,609
    
    
    
    1,970
    
    
    
    1,390Stock based compensation
    
    
    993
    
    
    
    734
    
    
    
    302Excess tax benefit of stock based compensation
    
    
    (249
    )
    
    
    (385
    )
    
    
    (169
    )Deferred income taxes
    
    
    (4,265
    )
    
    
    682
    
    
    
    (4,963
    )Changes in operating assets and liabilities, net of the
effects of acquisitions:Accounts receivable
    
    
    10,580
    
    
    
    (22,854
    )
    
    
    (3,762
    )Prepaid expenses
    
    
    (5,313
    )
    
    
    2,239
    
    
    
    (1,225
    )Inventories
    
    
    (4,154
    )
    
    
    (10,148
    )
    
    
    5,797Other current assets
    
    
    2,058
    
    
    
    
    
    
    
    Other assets
    
    
    (4
    )
    
    
    16
    
    
    
    (482
    )Accounts payable and accrued expenses
    
    
    (7,789
    )
    
    
    2,348
    
    
    
    (8,313
    )Other liabilities
    
    
    (270
    )
    
    
    (701
    )
    
    
    (734
    )Prepaid pension asset/liability for pension benefits
    
    
    1,591
    
    
    
    (2,017
    )
    
    
    3,255Net cash provided by operating activities
    
    
    44,216
    
    
    
    30,444
    
    
    
    49,517Cash flows from investing activities:Capital expenditures
    
    
    (6,399
    )
    
    
    (4,294
    )
    
    
    (4,999
    )Purchase of businesses, net of cash acquired
    
    
    
    
    
    
    (14,638
    )
    
    
    (17,637
    )Proceeds from disposal of plant and property
    
    
    1,049
    
    
    
    1,647
    
    
    
    2,811Net cash used in investing activities
    
    
    (5,350
    )
    
    
    (17,285
    )
    
    
    (19,825
    )Cash flows from financing activities:Borrowings on debt
    
    
    5,000
    
    
    
    18,000
    
    
    
    15,647Repayment of debt
    
    
    (21,755
    )
    
    
    (16,658
    )
    
    
    (40,621
    )Dividends
    
    
    (15,999
    )
    
    
    (15,916
    )
    
    
    (15,834
    )Purchase of treasury stock
    
    
    (599
    )
    
    
    
    
    
    
    Proceeds from exercise of stock options
    
    
    640
    
    
    
    673
    
    
    
    661Excess tax benefit of stock based compensation
    
    
    249
    
    
    
    385
    
    
    
    169Net cash used in financing activities
    
    
    (32,464
    )
    
    
    (13,516
    )
    
    
    (39,978
    )Effect of exchange rate changes on cash
    
    
    (509
    )
    
    
    168
    
    
    
    8Net change in cash and cash equivalents
    
    
    5,893
    
    
    
    (189
    )
    
    
    (10,278
    )Cash and cash equivalents at beginning of period
    
    
    3,393
    
    
    
    3,582
    
    
    
    13,860Cash and cash equivalents at end of period
    
    $
    9,286
    
    
    $
    3,393
    
    
    $
    3,582
  F-8




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (1) Significant Accounting Policies and General Matters
 Nature of Operations.
 Basis of Consolidation.
 Cash and Cash Equivalents.
 Accounts Receivable.
  Inventories.
 Property, Plant and Equipment
 Goodwill and Other Intangible Assets.
 F-9




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (1) Significant Accounting Policies and General Matters-continued
  Long-Lived Assets
 Fair Value of Financial Instruments
 Treasury Stock
 Deferred Finance Charges
 Revenue Recognition
 Advertising Expenses
 Income Taxes.
 Earnings (Loss) Per Share
 F-10




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (1) Significant Accounting Policies and General Matters-continued
  Accumulated Other Comprehensive Income (Loss)
 Derivative Instruments and Hedging Activities.
 Foreign Currency Translation.
  Estimates.
 Reclassifications.
 Shipping and Handling Costs.
 Stock Based Compensation.
 F-11




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (1) Significant Accounting Policies and General Matters-continued
 New Accounting Pronouncements
 FAS 157 .
 FAS 141R.
 FAS 160.
 FAS 161.
 FSP FAS 142-3.
 F-12




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (1) Significant Accounting Policies and General Matters-continued
 FAS 162. The Meaning of Present Fairly in Conformity with
Generally Accepted Accounting Principles
 FSP EITF 03-6-1
 FSP FAS 133-1 and FIN 45-4.
 FSP FAS 157-3.
 FSP FAS 157-4.
 FSP FAS 107-1 and APB 28-1.
 F-13




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (1) Significant Accounting Policies and General Matters-continued
  FSP FAS 132R-1.
 Concentrations of Risk
   (2) Due From Factors
     F-14




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (3) Accounts Receivable and Allowance for Doubtful Receivables
    2009
    
    
    2008
    
    
    2007Balance at beginning of period
    
    $
    3,954
    
    
    $
    2,698
    
    
    $
    3,001Bad debt expense
    
    
    3,609
    
    
    
    1,970
    
    
    
    1,390Other
    
    
    
    
    
    
    
    
    
    
    Recoveries
    
    
    24
    
    
    
    29
    
    
    
    101Accounts written off
    
    
    (4,026
    )
    
    
    (743
    )
    
    
    (1,794
    )Balance at end of period
    
    $
    3,561
    
    
    $
    3,954
    
    
    $
    2,698
 (4) Inventories
  2009
    
    
    2008Raw material
    
    $
    13,357
    
    
    $
    14,711Work-in-process
    
    
    13,090
    
    
    
    15,467Finished goods
    
    
    74,720
    
    
    
    68,392$
    101,167
    
    
    $
    98,570
  (5) Acquisitions and Disposal
  F-15




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (5) Acquisitions and Disposal-continued
  Accounts receivable
    
    $
    2,713Inventories
    
    
    1,711Other assets
    
    
    66Property, plant & equipment
    
    
    2,662Customer lists
    
    
    5,084Trademarks
    
    
    671Noncompete
    
    
    18Accounts payable and accrued liabilities
    
    
    (443
    )$
    12,482
   Accounts receivable
    
    $
    974Inventories
    
    
    346Property, plant & equipment
    
    
    419Customer lists
    
    
    767Trademarks
    
    
    306Noncompete
    
    
    15Accounts payable and accrued liabilities
    
    
    (171
    )$
    2,656
  Unaudited2008Pro forma net sales
    
    $
    631,786Pro forma net earnings
    
    
    44,979Pro forma earnings per share  diluted
    
    
    1.74
  (6) Goodwill and Other Intangible Assets
  F-16




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (6) Goodwill and Other Intangible Assets-continued
    GrossCarrying
    
    
    AccumulatedAs of February 28, 2009
    
    Amount
    
    
    Amortization
    
    
    NetAmortized intangible assets (in thousands)Tradenames
    
    $
    1,234
    
    
    $
    742
    
    
    $
    492Customer lists
    
    
    29,908
    
    
    
    7,901
    
    
    
    22,007Noncompete
    
    
    500
    
    
    
    467
    
    
    
    33$
    31,642
    
    
    $
    9,110
    
    
    $
    22,532
 As of February 29, 2008Amortized intangible assets (in thousands)Tradenames
    
    $
    1,234
    
    
    $
    592
    
    
    $
    642Customer lists
    
    
    29,908
    
    
    
    5,648
    
    
    
    24,260Noncompete
    
    
    500
    
    
    
    451
    
    
    
    49$
    31,642
    
    
    $
    6,691
    
    
    $
    24,951
 Fiscal Years Ended2009
    
    
    2008Non-amortizing intangible assets (in thousands)Trademarks
    
    $
    58,538
    
    
    $
    63,238
  F-17




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (6) Goodwill and Other Intangible Assets-continued
  2010
    
    $
    2,403,0002011
    
    
    2,397,0002012
    
    
    2,391,0002013
    
    
    2,347,0002014
    
    
    2,254,000
  Print
    
    
    ApparelSegment
    
    
    SegmentTotal
    
    
    Total
    
    
    TotalBalance as of March 1, 2007
    
    $
    40,614
    
    
    $
    137,700
    
    
    $
    178,314Goodwill acquired
    
    
    74
    
    
    
    
    
    
    
    74Balance as of March 1, 2008
    
    
    40,688
    
    
    
    137,700
    
    
    
    178,388Goodwill acquired
    
    
    2,104
    
    
    
    
    
    
    
    2,104Goodwill impairment
    
    
    
    
    
    
    (63,151
    )
    
    
    (63,151
    )Balance as of February 28, 2009
    
    $
    42,792
    
    
    $
    74,549
    
    
    $
    117,341
  (7) Other Accrued Expenses
  February 28, 2009
    
    
    February 29, 2008Accrued taxes
    
    $
    332
    
    
    $
    405Accrued legal and professional fees
    
    
    430
    
    
    
    244Accrued interest
    
    
    129
    
    
    
    604Accrued utilities
    
    
    1,499
    
    
    
    1,358Accrued repairs and maintenance
    
    
    410
    
    
    
    274Factored receivables with recourse
    
    
    
    
    
    
    539Accrued contract labor
    
    
    
    
    
    
    280Other accrued expenses
    
    
    1,906
    
    
    
    1,879$
    4,706
    
    
    $
    5,583
 (8) Derivative Instruments and Hedging Activities
   F-18




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (9) Fair Value Financial Instruments
   Level 1 
    
    Inputs utilize quoted prices (unadjusted) in active markets for identical
assets or liabilities that the Company has the ability to access.Level 2 
    
    Inputs utilize data points that are observable such as quoted prices,
interest rates and yield curves.Level 3 
    
    Inputs are unobservable data points for the asset or liability, and
include situations where there is little, if any, market activity for the asset or
liability.
   Fair Value Measurements UsingQuoted Prices in Active
    
    
    Significant Other
    
    
    SignificantMarkets for Identical
    
    
    Observable
    
    
    UnobservableAssets
    
    
    Input
    
    
    InputsDescription
    
    February 28, 2009
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Derivative asset
    
    $
    
    
    
    $
    
    
    
    
    
    
    
    $
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Derivative liability
    
    $
    (2,185
    )
    
    $
    
    
    
    $
    (2,185
    )
    
    $
    $
    (2,185
    )
    
    $
    
    
    
    $
    (2,185
    )
    
    $
    
 F-19




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (10) Long-Term Debt
  February 28, 2009
    
    
    February 29, 2008Revolving credit facility
    
    $
    74,000
    
    
    $
    90,500Interest rate swap
    
    
    2,185
    
    
    
    Capital lease obligations
    
    
    210
    
    
    
    452Other
    
    
    
    
    
    
    1376,395
    
    
    
    90,965Less current installments
    
    
    210
    
    
    
    255Long-term debt
    
    $
    76,185
    
    
    $
    90,710
    CapitalDebt
    
    
    Leases
    
    
    Total2010
    
    $
    
    
    
    $
    215
    
    
    $
    2152011
    
    
    76,185
    
    
    
    
    
    
    
    76,18576,185
    
    
    
    215
    
    
    
    76,400Less amount representing interest
    
    
    
    
    
    
    5
    
    
    
    5$
    76,185
    
    
    $
    210
    
    
    $
    76,395
 (11) Shareholders Equity
   F-20




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (12) Stock Option Plans and Stock Based Compensation
     WeightedNumber
    
    Weighted
    
    Average
    
    Aggregateof
    
    Average
    
    Remaining
    
    IntrinsicShares
    
    Exercise
    
    Contractual
    
    Value(a)(exact quantity)
    
    Price
    

Life (in years)
    
    (in thousands)Outstanding at March 1, 2006
    
    
    687,850
    
    
    $
    10.63
    
    
    
    4.6Granted
    
    
    
    
    
    
    Terminated
    
    
    (22,500
    )
    
    
    11.13Exercised
    
    
    (111,837
    )
    
    
    8.33Outstanding at February 28, 2007
    
    
    553,513
    
    
    $
    11.08
    
    
    
    3.9Granted
    
    
    
    
    
    
    Terminated
    
    
    (20,500
    )
    
    
    15.15Exercised
    
    
    (63,500
    )
    
    
    10.60Outstanding at February 29, 2008
    
    
    469,513
    
    
    $
    10.97
    
    
    
    2.9Granted
    
    
    
    
    
    
    Terminated
    
    
    (46,450
    )
    
    
    12.31Exercised
    
    
    (104,500
    )
    
    
    10.34Outstanding at February 28, 2009
    
    
    318,563
    
    
    $
    10.98
    
    
    
    2.4
    
    
    $
    75Exercisable at February 28, 2009
    
    
    300,138
    
    
    $
    10.65
    
    
    
    2.2
    
    
    $
    75
 
 (a)
    
    Value is calculated on the basis of the difference between the market value of the
Companys Common Stock as reported on the New York Stock Exchange on February 28, 2009 ($8.18) and the weighted exercise
price, multiplied by the number of shares indicated. F-21




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (12) Stock Option Plans and Stock Based Compensation-continued
  Fiscal years ended2009
    
    2008
    
    2007Total cash received
    
    $
    640
    
    
    $
    673
    
    
    $
    661Income tax benefits
    
    
    249
    
    
    
    385
    
    
    
    169Total grant-date fair value
    
    
    134
    
    
    
    83
    
    
    
    102Intrinsic value
    
    
    536
    
    
    
    611
    
    
    
    1,364
  WeightedAverageNumber
    
    Grant Dateof Options
    
    Fair ValueUnvested at February 29, 2008
    
    
    45,600
    
    
    $
    2.64New grants
    
    
    
    
    
    
    Vested
    
    
    (23,425
    )
    
    
    2.44Forfeited
    
    
    (3,750
    )
    
    
    2.84Unvested at February 28, 2009
    
    
    18,425
    
    
    
    2.85
   Options Outstanding
    
    Options ExercisableWeighted AverageRemaining
    
    Weighted
    
    
    
    
    
    WeightedNumber
    
    Contractual
    
    Average
    
    Number
    
    AverageExercise Prices
    
    Outstanding
    
    Life (in Years)
    
    Exercise Price
    
    Exercisable
    
    Exercise Price$  7.0625
    
    to
    
    $
    8.6875
    
    
    
    209,613
    
    
    
    0.8
    
    
    $
    8.10
    
    
    
    209,613
    
    
    $
    8.1011.6700
    
    
    
    
    
    
    
    
    
    
    10,000
    
    
    
    4.1
    
    
    
    11.67
    
    
    
    10,000
    
    
    
    11.6713.2800
    
    to
    
    
    16.4200
    
    
    
    66,450
    
    
    
    5.2
    
    
    
    15.69
    
    
    
    48,025
    
    
    
    15.4819.6900
    
    
    
    
    
    
    
    
    
    
    32,500
    
    
    
    7.0
    
    
    
    19.69
    
    
    
    32,500
    
    
    
    19.69318,563
    
    
    
    2.4
    
    
    
    10.98
    
    
    
    300,138
    
    
    
    10.65
 F-22




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (12) Stock Option Plans and Stock Based Compensation-continued
  WeightedAverageNumber of
    
    Grant DateShares
    
    Fair ValueOutstanding at March 1, 2006
    
    
    23,919
    
    
    $
    19.69Granted
    
    
    16,000
    
    
    
    19.64Terminated
    
    
    Exercised
    
    
    Outstanding at February 28, 2007
    
    
    39,919
    
    
    $
    19.67Granted
    
    
    56,600
    
    
    
    26.79Terminated
    
    
    (1,334
    )
    
    
    19.64Exercised
    
    
    (21,269
    )
    
    
    19.68Outstanding at February 29, 2008
    
    
    73,916
    
    
    $
    25.12Granted
    
    
    75,080
    
    
    
    15.67Terminated
    
    
    (15,236
    )
    
    
    19.89Exercised
    
    
    (30,669
    )
    
    
    24.05Outstanding at February 28, 2009
    
    
    103,091
    
    
    $
    19.33Exercisable at February 28, 2009
    
    
    
    
    
    $
    
  (13) Employee Benefit Plans
   2009
    
    2008Equity securities
    
    
    42
    %
    
    
    49
    %Debt securities
    
    
    48
    %
    
    
    44
    %Cash and cash equivalents
    
    
    10
    %
    
    
    7
    %Total
    
    
    100
    %
    
    
    100
    %
  F-23




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (13) Employee Benefit Plans-continued
 Target AllocationAsset Class
    
    PercentageMoney Market
    
    
    0 - 3
    %Bonds
    
    
    43 - 47
    %Stocks
    
    
    45 - 50
    %
    2009
    
    
    2008
    
    
    2007Components of net periodic benefit costService cost
    
    $
    1,341
    
    
    $
    1,430
    
    
    $
    1,440Interest cost
    
    
    2,627
    
    
    
    2,505
    
    
    
    2,440Expected return on plan assets
    
    
    (3,249
    )
    
    
    (3,079
    )
    
    
    (2,848
    )Amortization of:Prior service cost
    
    
    (145
    )
    
    
    (145
    )
    
    
    (145
    )Unrecognized net loss
    
    
    766
    
    
    
    905
    
    
    
    956Net periodic benefit cost
    
    
    1,340
    
    
    
    1,616
    
    
    
    1,843Other changes in Plan Assets and Projected Benefit Obligation
Recognized in Other comprehensive IncomeNet actuarial loss
    
    
    9,529
    
    
    
    (818
    )
    
    
    Amortization of net actuarial loss
    
    
    (766
    )
    
    
    (905
    )
    
    
    Amortization of prior service credit
    
    
    145
    
    
    
    145
    
    
    
    8,908
    
    
    
    (1,578
    )
    
    
    Total recognized in net periodic pension cost and
other comprehensive income
    
    $
    10,248
    
    
    $
    38
    
    
    $
    1,843
  2009
    
    2008
    
    2007Weighted average discount rate (net periodic pension cost)
    
    
    6.40
    %
    
    
    6.00
    %
    
    
    6.00
    %Earnings progression (net periodic pension cost)
    
    
    3.00
    %
    
    
    3.00
    %
    
    
    3.50
    %Expected long-term rate of return on plan assets
    
    
    8.00
    %
    
    
    8.00
    %
    
    
    8.00
    %Weighted average discount rate (benefit obligations)
    
    
    7.15
    %
    
    
    6.40
    %
    
    
    6.00
    %Earnings progression (benefit obligations)
    
    
    3.00
    %
    
    
    3.00
    %
    
    
    3.00
    %
 F-24




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (13) Employee Benefit Plans-continued
  2009
    
    
    2008Change in benefit obligationProjected benefit obligation at beginning of year
    
    $
    42,311
    
    
    $
    42,860Service cost
    
    
    1,341
    
    
    
    1,430Interest cost
    
    
    2,626
    
    
    
    2,505Actuarial loss
    
    
    (3,623
    )
    
    
    (1,970
    )Benefits paid
    
    
    (3,704
    )
    
    
    (2,514
    )Projected benefit obligation at end of year
    
    $
    38,951
    
    
    $
    42,311Change in plan assets:Fair value of plan assets at beginning of year
    
    $
    42,571
    
    
    $
    40,158Company contributions
    
    
    3,000
    
    
    
    3,000Gains on plan assets
    
    
    (9,904
    )
    
    
    1,927Benefits paid
    
    
    (3,704
    )
    
    
    (2,514
    )Fair value of plan assets at end of year
    
    $
    31,963
    
    
    $
    42,571Funded status (benefit obligation less plan assets)
    
    $
    (6,988
    )
    
    $
    260Accumulated benefit obligation at end of year
    
    $
    33,957
    
    
    $
    36,895
   ProjectedYear
    
    Payments2009
    
    $
    3,0752010
    
    
    3,8502011
    
    
    3,8702012
    
    
    4,6702013
    
    
    4,0352014  2018
    
    
    18,215
   F-25




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (14) Income Taxes
  2009
    
    
    2008
    
    
    2007Current:Federal
    
    $
    14,723
    
    
    $
    20,144
    
    
    $
    19,611State and local
    
    
    3,444
    
    
    
    2,787
    
    
    
    3,849Foreign
    
    
    573
    
    
    
    2,147
    
    
    
    1,624Deferred
    
    
    969
    
    
    
    117
    
    
    
    (320
    )Total provision for income taxes
    
    $
    19,709
    
    
    $
    25,195
    
    
    $
    24,764
  2009
    
    
    2008
    
    
    2007Statutory rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %Provision for state income taxes, net of Federal income tax benefit
    
    
    (18.4
    )
    
    
    2.6
    
    
    
    3.9Impairment of goodwill
    
    
    (169.3
    )
    
    
    
    
    
    
    Other
    
    
    1.8
    
    
    
    (1.5
    )
    
    
    (1.6
    )(150.9
    )%
    
    
    36.1
    %
    
    
    37.3
    %
  2009
    
    
    2008Current deferred tax assets related to:Allowance for doubtful receivables
    
    $
    1,366
    
    
    $
    1,517Inventories
    
    
    2,739
    
    
    
    4,100Employee compensation and benefits
    
    
    1,661
    
    
    
    1,715Other
    
    
    (38
    )
    
    
    454$
    5,728
    
    
    $
    7,786Noncurrent deferred tax liability (asset) related to:Property, plan and equipment
    
    $
    4,787
    
    
    $
    4,960Goodwill and other intangible assets
    
    
    20,084
    
    
    
    18,944Pension and noncurrent employee compensation benefits
    
    
    (3,644
    )
    
    
    (1,471
    )Net operating loss and foreign tax credits
    
    
    (3,143
    )
    
    
    (2,365
    )Interest rate swap
    
    
    (838
    )
    
    
    Other
    
    
    (996
    )
    
    
    707$
    16,250
    
    
    $
    20,775
 F-26




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (14) Income Taxes-continued
    2009
    
    
    2008Balance at beginning of year
    
    $
    201
    
    
    $
    202Additions based on tax positions related to the current year
    
    
    109
    
    
    
    67Reductions due to lapses of statutes of limitations
    
    
    (67
    )
    
    
    (68
    )Balance at end of year
    
    $
    243
    
    
    $
    201
   (15) Earnings (loss) per Share
  F-27




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (15) Earnings (loss) per Share-continued
 2009
    
    
    2008
    
    
    2007Basic weighted average common shares outstanding
    
    
    25,707,265
    
    
    
    25,623,325
    
    
    
    25,530,732Effect of dilutive options
    
    
    82,901
    
    
    
    237,033
    
    
    
    228,216Diluted weighted average common shares outstanding
    
    
    25,790,166
    
    
    
    25,860,358
    
    
    
    25,758,948Per share amounts:Net earnings (loss)  basic
    
    $
    (1.27
    )
    
    $
    1.74
    
    
    $
    1.63Net earnings (loss)  diluted
    
    $
    (1.27
    )
    
    $
    1.72
    
    
    $
    1.62Cash dividends
    
    $
    0.62
    
    
    $
    0.62
    
    
    $
    0.62
 (16) Segment Information and Geographic Information
   SM SM SM SM SM SM SM SM SM SM
    F-28




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (16) Segment Information and Geographic Information-continued
  Print
    
    Apparel
    
    
    
    
    
    ConsolidatedSegment
    
    Segment
    
    Corporate
    
    TotalsFiscal year ended February 28, 2009:Net sales
    
    $
    327,034
    
    
    $
    256,995
    
    
    $
    
    
    
    $
    584,029Depreciation
    
    
    6,406
    
    
    
    2,640
    
    
    
    947
    
    
    
    9,993Amortization of identifiable intangibles
    
    
    952
    
    
    
    1,467
    
    
    
    
    
    
    
    2,419Impairment of goodwill and trademarks
    
    
    
    
    
    
    67,851
    
    
    
    
    
    
    
    67,851Segment earnings (loss) before
income tax
    
    
    51,553
    
    
    
    (49,416
    )
    
    
    (15,196
    )
    
    
    (13,059
    )Segment assets
    
    
    152,971
    
    
    
    267,499
    
    
    
    15,910
    
    
    
    436,380Capital expenditures
    
    
    5,973
    
    
    
    324
    
    
    
    102
    
    
    
    6,399Fiscal year ended February 29, 2008:Net sales
    
    $
    345,042
    
    
    $
    265,568
    
    
    $
    
    
    
    $
    610,610Depreciation
    
    
    8,009
    
    
    
    3,306
    
    
    
    902
    
    
    
    12,217Amortization of identifiable intangibles
    
    
    595
    
    
    
    1,467
    
    
    
    
    
    
    
    2,062Segment earnings (loss) before
income tax
    
    
    56,012
    
    
    
    29,367
    
    
    
    (15,594
    )
    
    
    69,785Segment assets
    
    
    157,979
    
    
    
    347,861
    
    
    
    7,291
    
    
    
    513,131Capital expenditures
    
    
    2,939
    
    
    
    1,275
    
    
    
    80
    
    
    
    4,294Fiscal year ended February 28, 2007:Net sales
    
    $
    325,679
    
    
    $
    259,034
    
    
    $
    
    
    
    $
    584,713Depreciation
    
    
    8,275
    
    
    
    5,745
    
    
    
    650
    
    
    
    14,670Amortization of identifiable intangibles
    
    
    384
    
    
    
    1,573
    
    
    
    
    
    
    
    1,957Segment earnings (loss) before
income tax
    
    
    46,077
    
    
    
    33,321
    
    
    
    (13,033
    )
    
    
    66,365Segment assets
    
    
    151,746
    
    
    
    313,716
    
    
    
    12,766
    
    
    
    478,228Capital expenditures
    
    
    2,647
    
    
    
    1,038
    
    
    
    1,314
    
    
    
    4,999
  United States
    
    
    Canada
    
    
    Mexico
    
    
    Total2009Net sales to unaffiliated customersPrint Segment
    
    $
    327,034
    
    
    $
    
    
    
    $
    
    
    
    $
    327,034Apparel Segment
    
    
    240,798
    
    
    
    14,913
    
    
    
    1,284
    
    
    
    256,995$
    567,832
    
    
    $
    14,913
    
    
    $
    1,284
    
    
    $
    584,029Identifiable long-lived assetsPrint Segment
    
    $
    42,272
    
    
    $
    
    
    
    $
    
    
    
    
    42,272Apparel Segment
    
    
    5,856
    
    
    
    38
    
    
    
    1,173
    
    
    
    7,067Corporate
    
    
    5,333
    
    
    
    
    
    
    
    
    
    
    
    5,333$
    53,461
    
    
    $
    38
    
    
    $
    1,173
    
    
    $
    54,672
 F-29




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (16) Segment Information and Geographic Information-continued
 United States
    
    
    Canada
    
    
    Mexico
    
    
    Total2008Net sales to unaffiliated customersPrint Segment
    
    $
    345,042
    
    
    $
    
    
    
    $
    
    
    
    $
    345,042Apparel Segment
    
    
    248,431
    
    
    
    17,137
    
    
    
    
    
    
    
    265,568$
    593,473
    
    
    $
    17,137
    
    
    $
    
    
    
    $
    610,610Identifiable long-lived assetsPrint Segment
    
    $
    43,004
    
    
    $
    
    
    
    $
    
    
    
    
    43,004Apparel Segment
    
    
    7,698
    
    
    
    74
    
    
    
    2,092
    
    
    
    9,864Corporate
    
    
    6,120
    
    
    
    
    
    
    
    
    
    
    
    6,120$
    56,822
    
    
    $
    74
    
    
    $
    2,092
    
    
    $
    58,9882007Net sales to unaffiliated customersPrint Segment
    
    $
    325,679
    
    
    $
    
    
    
    $
    
    
    
    $
    325,679Apparel Segment
    
    
    241,477
    
    
    
    17,557
    
    
    
    
    
    
    
    259,034$
    567,156
    
    
    $
    17,557
    
    
    $
    
    
    
    $
    584,713Identifiable long-lived assetsPrint Segment
    
    $
    44,291
    
    
    $
    
    
    
    $
    
    
    
    
    44,291Apparel Segment
    
    
    9,002
    
    
    
    102
    
    
    
    2,721
    
    
    
    11,825Corporate
    
    
    6,941
    
    
    
    
    
    
    
    
    
    
    
    6,941$
    60,234
    
    
    $
    102
    
    
    $
    2,721
    
    
    $
    63,057
 (17) Commitments and Contingencies
  OperatingLease
    
    
    SubleaseCommitments
    
    
    Income
    
    
    Net2010
    
    $
    5,409
    
    
    $
    (67
    )
    
    $
    5,3422011
    
    
    4,049
    
    
    
    
    
    
    
    4,0492012
    
    
    2,354
    
    
    
    
    
    
    
    2,3542013
    
    
    1,615
    
    
    
    
    
    
    
    1,6152014
    
    
    575
    
    
    
    
    
    
    
    575Thereafter
    
    
    21
    
    
    
    
    
    
    
    21$
    14,023
    
    
    $
    (67
    )
    
    $
    13,956
    F-30




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (18) Supplemental Cash Flow Information
  2009
    
    2008
    
    2007Interest paid
    
    $
    3,838
    
    
    $
    6,048
    
    
    $
    6,646Income taxes paid
    
    $
    24,522
    
    
    $
    25,208
    
    
    $
    26,657
  2009
    
    2008
    
    2007Fair value of assets acquired in acquisitions
    
    $
    
    
    
    $
    15,752
    
    
    $
    22,236Liabilities assumed in acquisitions
    
    $
    
    
    
    $
    614
    
    
    $
    4,608
 (19) Quarterly Consolidated Financial Information (Unaudited)
  For the Three Months Ended
    
    May 31
    
    August 31
    
    November 30
    
    February 28Fiscal year ended 2009:Net sales
    
    $
    163,200
    
    
    $
    161,050
    
    
    $
    142,453
    
    
    $
    117,326Gross profit
    
    
    40,452
    
    
    
    39,238
    
    
    
    37,857
    
    
    
    25,929Net earnings (loss)
    
    
    10,936
    
    
    
    9,341
    
    
    
    9,876
    
    
    
    (62,921
    )Dividends paid
    
    
    3,987
    
    
    
    3,998
    
    
    
    4,007
    
    
    
    4,007Per share of common stock:Basic net earnings (loss)
    
    $
    0.43
    
    
    $
    0.36
    
    
    $
    0.38
    
    
    $
    (2.44
    )Diluted net earnings (loss)
    
    $
    0.42
    
    
    $
    0.36
    
    
    $
    0.38
    
    
    $
    (2.44
    )Dividends
    
    $
    0.155
    
    
    $
    0.155
    
    
    $
    0.155
    
    
    $
    0.155Fiscal year ended 2008:Net sales
    
    $
    152,774
    
    
    $
    150,086
    
    
    $
    158,215
    
    
    $
    149,535Gross profit
    
    
    41,358
    
    
    
    41,339
    
    
    
    42,034
    
    
    
    39,143Net earnings
    
    
    10,796
    
    
    
    11,138
    
    
    
    11,568
    
    
    
    11,088Dividends paid
    
    
    3,967
    
    
    
    3,976
    
    
    
    3,986
    
    
    
    3,987Per share of common stock:Basic net earnings
    
    $
    0.42
    
    
    $
    0.44
    
    
    $
    0.45
    
    
    $
    0.43Diluted net earnings
    
    $
    0.42
    
    
    $
    0.43
    
    
    $
    0.45
    
    
    $
    0.43Dividends
    
    $
    0.155
    
    
    $
    0.155
    
    
    $
    0.155
    
    
    $
    0.155
 Current Quarter Compared to Same Quarter Last Year
   F-31




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (20) Subsequent Events
 1 2
 F-32




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##### Table of Contents



INDEX TO EXHIBITS
 Exhibit Number
    
    Description of DocumentExhibit 3.1(a)
    
    Restated Articles of Incorporation as amended through June 23, 1983 with
attached amendments dated June 20, 1985, July 31, 1985 and June 16, 1988
incorporated herein by reference to Exhibit 5 to the Registrants Annual
Report on Form 10-K for the fiscal year ended February 28, 1993.Exhibit 3.1(b)
    
    Amendment to articles of Incorporation dated June 17, 2004 incorporated
herein incorporated herein by reference to Exhibit 3.1(b) to the
Registrants Annual Report on Form 10-K for the fiscal year ended February
28, 2007.Exhibit 3.2(a)
    
    Bylaws of the Registrant as amended through October 15, 1997 incorporated
herein by reference to Exhibit 3(ii) to the Registrants Quarterly Report
on Form 10-Q for the quarter ended November 30, 1997.Exhibit 3.2(b)
    
    First amendment to Bylaws of the Registrant dated December 20, 2007
incorporated herein by reference to Exhibit 3.1 to the Registrants Current
Report on Form 8-K filed on December 20, 2007.Exhibit 10.1
    
    Employee Agreement between Ennis, Inc. and Keith S. Walters dated December
19, 2008 incorporated herein by reference to Exhibit 10.1 to the
Registrants Current Report on Form 8-K filed on January 20, 2009.Exhibit 10.2
    
    Employee Agreement between Ennis, Inc. and Michael D. Magill dated December
19, 2008 incorporated herein by reference to Exhibit 10.2 to the
Registrants Current Report on Form 8-K filed on January 20, 2009.Exhibit 10.3
    
    Employee Agreement between Ennis, Inc. and Ronald M. Graham dated December
19, 2008 incorporated herein by reference to Exhibit 10.3 to the
Registrants Current Report on Form 8-K filed on January 20, 2009.Exhibit 10.4
    
    Employee Agreement between Ennis, Inc. and Richard L. Travis, Jr. dated
December 19, 2008 incorporated herein by reference to Exhibit 10.4 to the
Registrants Current Report on Form 8-K filed on January 20, 2009.Exhibit 10.5
    
    Employee Agreement between Ennis, Inc. and Irshad Ahmad, Vice
President-Apparel Group and CTO dated December 19, 2008 incorporated herein
by reference to Exhibit 10.5 to the Registrants Current Report on Form 8-K
filed on January 20, 2009.Exhibit 10.6
    
    2004 Long-Term Incentive Plan incorporated herein by reference to Exhibit
4.1 of the Registrants Current Report on Form S-8 filed on January 5,
2005.Exhibit 10.7
    
    Form of Executive Incentive and Non-Qualified Stock Option Agreement
granted February 27, 2006 incorporated herein by reference to Exhibit 10.2
to the Registrants Current Report on Form 8-K filed on March 1, 2006.Exhibit 10.8
    
    Form of Executive Restricted Stock Agreement granted February 27, 2006
incorporated herein by reference to Exhibit 10.2 to the Registrants
Current Report on Form 8-K filed on March 1, 2006.Exhibit 10.9
    
    Indemnity Agreement dated as of June 25, 2004, by and among Laurence
Ashkin, Roger Brown, John McLinden, Arthur Slaven, Ennis, Inc. and
Midlothian Holdings LLC incorporated herein by reference to Exhibit 10.7 to
the Registrants Form S-4 filed on September 3, 2004.Exhibit 10.10
    
    UPS Ground, Air Hundredweight and Sonicair Incentive Program Carrier
Agreement incorporated herein by reference to Exhibit 10 to the
Registrants Annual Report on Form 10-K for the fiscal year ended February
28, 2003.Exhibit 10.11
    
    Addendum to UPS Ground, Air and Sonicair Incentive Program Carrier
Agreement dated as of August 9, 2004, between Ennis, Inc. and United Parcel
Service, Inc. incorporated herein by reference to Exhibit 10.10 to the
Registrants Form S-4 filed on September 3, 2004.*
 E-1




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##### Table of Contents



INDEX TO EXHIBITS
 Exhibit Number
    
    Description of DocumentExhibit 10.12
    
    Carbonless Paper Agreement dated as of July 13, 2004 between Ennis, Inc &
MeadWestvaco Corporation incorporated herein by reference to Exhibit 10.11
to the Registrants Form S-4 filed on September 3, 2004.*Exhibit 10.13
    
    Amended and Restated Credit Agreement dated as of March 31, 2006 among
Ennis, Inc., various other parties that sign and become a party to the
security agreement and LaSalle Bank National Association, as the
Administrative Agent incorporated herein by reference to Exhibit 10.18 to
the Registrants Annual Report on Form 10-K for the fiscal year ended
February 28, 2006.Exhibit 10.14
    
    Amended and Restated Security Agreement dated as of March 31, 2006 among
Ennis, Inc. various other parties that sign and become a party to the
security agreement and LaSalle Bank National Association, as the
Administrative Agent incorporated herein by reference to Exhibit 10.19 to
the Registrants Annual Report on Form 10-K for the fiscal year ended
February 28, 2006.Exhibit 21
    
    Subsidiaries of RegistrantExhibit 23
    
    Consent of Independent Registered Public Accounting FirmExhibit 31.1
    
    Certification Pursuant to Rule 13a-14(a)/15d-14(a) (Chief Executive Officer)Exhibit 31.2
    
    Certification Pursuant to Rule 13a-14(a)/15d-14(a) (Chief Financial Officer)Exhibit 32.1
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002Exhibit 32.2
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
 
 *
    
    Portions of Exhibit have been omitted pursuant to a request for confidential treatment filed with
the SEC. E-2